By Gene Marcial, DailyFinance

Every quarter, stock pickers at investment firm Gabelli & Co. come up with five value stocks that are trading way below their intrinsic worth. It's a nervy and challenging task, especially because the Gabelli analysts identify the catalysts they believe would catapult the shares to their utmost potential. And each quarter, their choices deliver enviable results.

The Gabelli team has been picking what it calls its "Focus Five" stocks since Jan. 31, 2006, and within that time span their calls have advanced a mighty 168.6%, outdistancing by a wide margin the Standard & Poor's 500 stock index, which lost 3.7% in that period. During the previous quarter (Aug. 1 to Oct. 29), the Focus Five also outperformed the S&P 500, with a gain of 13.53% vs. S&P's 7.41% gain.
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Daniel M. Miller, who heads the Gabelli Focus Five team, notes that each chosen stock, for the most part, outperformed the S&P quite convincingly. One such super-performer was Take Two Interactive ( TTWO), which advanced 84% in the first quarter of 2008, beating the S&P's 4% gain. And Oceaneering International ( OII), which jumped 44% in the second quarter of 2006, handily outperformed the S&P, which declined 5.84% during that quarter.

Here are the latest Focus Five hopefuls for the final quarter of 2010:

Madison Square Garden ( MSG), spun off in February 2010 by Cablevision ( CVC). It controls leading sports and entertainment assets, including the New York Knicks of the National Basketball Association, the New York Rangers of the National Hockey League and a number of cable networks and real estate properties.

Clear Channel Outdoor Holdings ( CCO), the leading global outdoor advertising company. It operates in several top markets in the U.S. and in 20 other countries.

National Fuel Gas ( NFG), an integrated energy company with six operating segments. Its businesses include utility operations, natural-gas transmission pipelines that provide interstate gas transportation and storage services from Pennsylvania to the New York-Canadian border, and exploration and production, primarily in California, Appalachia and the Gulf of Mexico.

NII Holdings ( NIHD), a Reston, Va.-based leading provider of digital wireless services. It offers products and services for individuals and businesses in Argentina, Brazil, Chile, Mexico and Peru.

Penske Automotive Group ( PAG), which operates dealerships that sell new and used vehicles and aftermarket auto products. It operates mostly in the U.S. and Britain.

Miller believes that Madison Square Garden, currently trading at $20 a share, is priced way below its real worth because it owns some of the most valuable assets in New York City. Apart from its legendary Madison Square Garden sports and entertainment arena, the company also owns the world-famous Radio City Music Hall, the Beacon Theater and Chicago Theater. The now-publicly traded MSG, says Miller, is fully focused on enhancing shareholder value in an effort to attract more investors. Miller argues that MSG's sports networks alone are worth the current price of the stock and that investors are paying practically nothing for the rest of company's assets. Miller puts the private market value of MSG at $50 a share.

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